In fact, dividends are a way to realize income. If it is a cash dividend, it is equivalent to converting part of the book assets into dividends and returning them to the fund account. After the corresponding dividends, the book assets (book assets = net value of the latest fund × fund share) will decrease.

If the dividend method is dividend to investment, the latest net value of the fund decreases and the fund share increases after dividend, indicating that the book assets have not changed.

Fund dividends will not increase in value out of thin air. Before dividends are paid, the net value of the funds subscribed by investors is higher, but they can enjoy the rights and interests of dividends. In fact, the cost of investment is immediately returned to the investor's account in the form of dividends.

Extended data:

Fund dividend means that the fund distributes part of the income to investors in cash, which is originally a part of the net value of the fund unit.

According to the Interim Measures for the Administration of Securities Investment Funds, fund management companies should distribute at least 90% of the net income of funds in cash once a year. The "Interim Measures" have expired, and how to allocate them now is subject to the provisions of the Fund Contract.

Dividends are not as much as possible. Investors should choose a dividend distribution method that suits their own needs. Fund dividend is not the biggest standard to measure fund performance. The biggest criterion to measure the fund's performance is the growth of the fund's net value, and dividends are just the cash for the growth of the fund's net value.

For open-end funds, if investors want to realize income, they can also redeem part of the fund shares to achieve the effect of cash dividends; Therefore, whether the fund pays dividends and the number of dividends will not have a significant impact on investors' investment income.

For closed-end funds, it is sometimes not feasible to realize fund income by selling fund shares because the unit price of the fund is often different from the net value of the fund.

In this case, fund dividends become the only reliable way to realize fund income. Investors should pay more attention to dividends when choosing closed-end funds.

References:

Baidu Encyclopedia-Fund Dividends